Good afternoon, everyone. My name is Susan Peterson, and I'm lucky enough to be the Chair of the Board of Directors at Vista Group International Limited. On behalf of the Board of Directors, it's my very great pleasure to welcome you all to our annual shareholders meeting for 2025. Thank you very much to our share registrar, MUFG Corporate Markets, for hosting us at their offices today and for providing the virtual meeting platform for those of us who are joining online. The virtual meeting platform enables you to vote and ask questions, and we encourage your participation. I'll provide you with further instructions as we progress through this meeting. If you encounter any issues, please refer to the virtual meeting guide, or you can phone the helpline on 0800 200 220. That's 0800 200 220. Now, before beginning the business of this meeting, I'll introduce my fellow directors.
We have James Miller, who also chairs our Audit and Risk Committee. We have Chris Nicole, who chairs our Nominations and Remuneration Committee. We have Murray Holdaway, our co-founder of Vista Group, Claudia Batten, and Kirk Sr. Our CEO, Stuart Dickinson, is present, as are other members of our global senior leadership team. Our auditors, represented by Troy Florence from PwC, are also with us today. Thanks, Troy. Kelvin Preston, our Group General Counsel and Company Secretary, has informed me that their quorum is present, and accordingly, I can now declare our meeting open. I confirm that valid proxies and postal votes have been received in relation to approximately 142 million voting shares, representing 59.64% of voting shares on issue. Now, today you'll hear from me regarding Vista Group's progress and the board's priorities, and from our CEO, Stuart Dickinson.
We'll then put forward the resolutions described in the notice of meeting and respond to any general questions that you may have. We'll address any questions in respect of today's presentations or the 2024 annual report in the general business section at the end of the meeting. Any questions in respect of the resolutions will be addressed as they are put to the meeting. For those of you here, you can ask a question by raising your hand. For those of you who are online, please ask questions through the virtual meeting platform, and I encourage you to do that as soon as you're able. Now, let me turn to Vista Group's progress over the past year. The past year for Vista Group may best be described as one of strong performance in an extremely challenging environment.
The economic conditions provided a very demanding operating environment for our clients, our team, and wider communities across the world. At Vista Group, our commitment to helping more clients to be successful sits at the heart of everything we do. This year, our team has supported a growing number of clients to successfully transition to our cloud-based offerings and enabled greater value to be realized by them and their customers. Vista Cloud provides our clients with greater operational efficiency, systems resilience and security, greater ability to scale for those blockbuster moments, much faster access to innovation, and new revenue opportunities for our clients. Stuart will talk some more shortly about some of the great work he and the team have been doing with our clients over the course of this year.
Now, we remain relentlessly focused on continuous improvement and generating accelerated operating performance, and our team delivered a standout financial performance for 2024. Our focus on lifting the operational efficiency of our business resulted in an EBITDA margin of 14.4% or 15.5% excluding foreign exchange. This exceeded our first-half market guidance. In parallel, we have focused on growing our recurring revenue, which is up 9% on 2023. Our total revenue of NZD 150 million represented a Vista Group record. The impact of these strategies has seen us delivering positive free cash flow for the second half of 2024. The execution of our cloud strategy is now making Vista's outlook more predictable. This growing confidence has been reflected in the share price appreciation of 88% in the 2024 calendar year, the third highest in NZX 50 companies.
Vista remains in a growth phase as we transition to the cloud and find more ways to support our clients to thrive. Our aspiration remains to be a world-class global SaaS company that connects more clients to software and platform solutions that generate the greatest value for them. Best practice corporate governance remains a priority, and the board is steadfastly committed to acting in the best interests of all of our shareholders. The board is focused on ensuring market transparency at a time of significant change in our shareholder register. I'm extremely proud of the board's efforts to both support Stuart and the management team to remain focused on executing on the strategy while also doing what was required to preserve the collective interests of our shareholders during this time.
Over the past year, we've engaged extensively with shareholders and other stakeholders to ensure that our governance decisions took their thoughts into account so that we could be confident that any decisions reflected the best interests of all of our shareholders. During March, Chris Nicole and I undertook our annual governance roadshow. We held meetings with a number of Vista Group's institutional investors and shareholder representative groups. All shareholders would have had access to a copy of that presentation and could see them on the two exchanges. It was great to hear more from our shareholders about their thoughts on the opportunities that lie ahead, how they assess our performance, and how we are thinking about board succession planning. We have an established board succession process, including an evaluation of candidates against our published board skills matrix.
While board succession was necessarily paused in the second half of 2024, the board has recommenced our director succession processes to ensure that Vista Group continues to have the requisite governance capability and experience to support the successful execution of the strategy. This process has well progressed, and the board expects to be in a position to provide further information regarding the outcome of this process in coming months. Under the oversight of the Nomination and Remuneration Committee, further changes have been made to our executive compensation structures in 2024. This was in response to market feedback and also to provide greater transparency on how reward and recognition is linked to performance at Vista. The Nomination and Remuneration Committee also led the benchmarking work that supports the proposed directors with the increase in the director fee pool under Resolution 4. Now, I'd like to turn to acknowledge our friend Kirk.
Today is Kirk's last AGM as a director, as he formally retires at the conclusion of the meeting. Kirk has a long history worth and has been instrumental in the shaping of the success of Vista Group. In the period prior to Vista Group's initial public offering and during his tenure at Village Roadshow, Kirk has been a client, a joint venture partner, and a consultant to Vista. At the time of listing, Kirk led the board as chair and also in an executive capacity, being responsible for expanding Vista Group's global market share and establishing and acquiring additional businesses within the film vertical. Throughout, Kirk has brought a strong connection and understanding of the film industry and also deep client relationships.
When Kirk stepped down as chair in 2021, we were delighted to be able to retain Kirk's experience and connection to the board table as he agreed to continue on as a non-executive director. Kirk, as you step down from your role as a director on behalf of the board and all of our team, I want to extend our sincere thanks for all that you've contributed and wish you all the very, very best for you and your family, for your future endeavors in the years ahead. I would also like to express my sincere gratitude to my fellow directors for their continued commitment and support through what has been an extremely demanding year. A warm thanks to Stuart and everyone in our team for their hard work and enduring commitment to the success of our clients. We can be really proud of what we've achieved together.
Finally, I would like to personally thank you, our shareholders, for so generously giving us your time throughout the past year and, most importantly, standing with us during the most challenging moments. We look forward to delivering more value to you in the year ahead. Nō reira, tēnā koutou, tēnā koutou, tēnā koutou katoa. I'll now hand over to Stuart.
Each step of a movie's journey and every cinematic moment is connected by a network of intelligence behind the screens designed to bring stories to life, uniting studios and distributors, exhibitors, and audiences, creating a world where technology bridges the divide between distribution and exhibition, and data predicts demand, helping you make smarter decisions faster. Where distribution is optimized, ensuring every film illuminates the right screens at the right time. Where moviegoers connect with personalized communications that helps every movie find its perfect audience. Where you can rely on ticketing to scale effortlessly to meet blockbuster demand, guaranteeing seamless digital experiences for even the largest audiences. Where empowered cinema crew help create a lifetime of memories while the treats you love make every moment sweeter, and where every journey comes full circle. The end of every moviegoer's visit sparks the beginning of their next. That's the power of connection.
That's the power of Vista.
Thank you, Susan, for the introduction. Good afternoon and welcome, everybody, here today. That video was first presented in CinemaCon in March this year, and it's a great demonstration, I think, of the strength of Vista's ecosystem and how it benefits the entire film industry value chain. Our vision is to place our solutions at the heart of a connected film industry, enabling exceptional cinematic experiences and driving continuous innovation through the delivery of outstanding software. I think that the video exemplifies the momentum we are continuing to demonstrate as a business in this ambition. Our primary focus is to accelerate this progress by scaling the cloud onboarding process as we welcome existing and new clients to our cloud solutions.
A strong and sustainable business and financial performance is also important, and in 2024, we saw the benefits of our simplified business model as we achieved positive free cash flow through the entire second half of the year, improved our operating leverage, and surpassed our EBITDA target margins with an improved 15.5% after adjusting for foreign exchange. Additionally, we introduced and shipped several exciting innovations that have enhanced experiences and reduced the service costs for our clients. This will be familiar content for some of you, and it continues to represent our progress as we work towards our IRR aspiration. The journey to Vista Cloud is designed to help our clients improve their cinema businesses. When we announced the cloud strategy in 2022, we laid out these proof points. 2023 was about supporting and proving product-market fit.
2024 was about proving delivery at scale, which we have done with 15% of clients on digital solutions at the end of the past year. Now into 2025, our commitment to propel our onboarding work is unyielding as we support our clients to get the full benefit of Vista Cloud solutions. Balancing free cash flow and client onboarding targets remains a key focus, particularly amid a softer-than-expected first-quarter domestic box office, currency headwinds, and ongoing global trade volatility. These competing pressures will require careful monitoring as they continue to shape the business environment this year. As I mentioned earlier, having 15% of our clients on Vista Cloud digital solutions at the end of 2024 was a pleasing result. Now, with our 2025 proof point being to deliver at pace, we project to have approximately 35% of our enterprise sites on digital solutions by the end of this year.
With respect to the different capabilities of our cloud journey, this will translate to approximately two-thirds of our clients being on the first step of the journey with data empowerment, one-third on our digital solutions capability of digital enablement and moviegoer engagement, and one-sixth of our clients who have completed their full journey to operational excellence. We believe that this progress significantly and sufficiently validates our 100% platform strategy. I've touched on client momentum, and as you can see, we have some really great clients coming on board our cloud journey. Over the past few months, we've been pleased to announce continued progress in client signings to Vista Cloud, including Odeon with 309 sites and Village in Australia with 20 cinema sites.
US-based Synergy Entertainment Group, a leader in the family entertainment space, has also signed to Vista Cloud, and they will leverage our integrated solutions and extensive platform capabilities to help streamline their operations. Along with signings, we have also made steady delivery progress with significant projects due to go live in the second half of this year. As I said at our annual result presentation, our cloud onboardings will likely always track towards the end of the year as we navigate the North American and European summers and movie release windows. To get into a bit more detail on our cloud client experience, our announcement that Odeon had signed to Vista Cloud was a significant milestone earlier this year.
The quote from Odeon's Group Technology Officer shows how Vista Cloud will enhance their moviegoer journey, with Odeon's move to cloud being driven by their commitment to provide every guest with an inspiring entertainment experience. We were pleased to complete the final part of transitioning Pathé over to operational excellence, or full Vista Cloud, as we call it, with their remaining sites in Switzerland and Africa going live at the start of this year. This followed on from Pathé Belgium, Netherlands, and France's successful migrations in 2024. Enterprise software projects are never simple, and it is a testament to the Pathé and Vista Group teams who worked so well together to deliver this great outcome. Pathé shared their positive experience with the migration, further underscoring our commitment to delivering robust and reliable cloud solutions that meet the diverse needs of all of our global clients.
This success story is just one example of how Vista Cloud is transforming the way our clients operate and thrive in a super competitive market. We recently completed a case study with Fat Cats, a US-based family entertainment center, and heard directly from them about how Vista Cloud had supported their digital capabilities and greatly improved on their previous solution. They told us that Vista Cloud has proven robust scalability for traffic, provided seamless experiences for their staff and moviegoers, and our ongoing innovation is supporting their success. It's great to hear these client experiences as we continue to improve and accelerate Vista Cloud growth through client success and efficient onboarding. As our momentum accelerates, we are also exploring adjacencies that capitalize on our strengths to increase our total addressable market and sustainable growth beyond the Vista Cloud transition.
Our future is more predictable, and as we continue to make progress through transformation, we're now considering other opportunities outside of cinema and specifically looking at how we develop our ecosystem. As we look to expand opportunities into these broader-based areas, the most immediate opportunity available to us is by adding embedded payments functionality into our solution, leveraging and delivering more value to our clients who are already established. We will obviously continue to support clients as they broaden their operations into different SaaS verticals as well, such as the family entertainment and fast-growing market. With our platform already being used in this vertical by some of our cinema clients, there is an opportunity to build out a go-to-market strategy to increase focus on this area. Finally, we're also exploring the potential that our technology has to resolve some of the long-standing challenges in the film and distribution market.
It's very rare that you get an opportunity in your career to support the transformation of an industry, let alone one as storied and as culturally significant as our collective experience with great theatrical movies. The team and I remain incredibly excited by this and the other opportunities we have ahead of us. I also wanted to take this chance to thank each and every one of them for their tireless work as we deliver on this mission. Our business operates from the edge of the world, but with a 46% global market share in enterprise clients to which we are delivering innovative cloud solutions at pace, the investment proposition I believe for Vista Group is clear. Our IRR platform ambition of $300 million at 100% platform will provide sustainable growth.
Meanwhile, we are improving our cash flows and margins and turning our focus to delivering towards the rule of 40. We are not going to be satisfied by achieving our platform ambitions, though, and we want to harness new opportunities on the horizon that will open up fruitful possibilities for us to continue to grow the business well beyond that in the future. Thank you for your time today, and I'll now hand back to Susan.
Thank you, Stu. We now come to the formal business of the meeting. The resolutions and accompanying explanatory notes are set out in the notice of meeting. A reminder that any questions in respect of each of the resolutions will be addressed as the relevant resolutions are put to the meeting. For those of you who are here, please raise your hand if you have a question, and a microphone will be brought to you. Please state your name and whether or not you're a shareholder or if you're a proxy holder or corporate representative. Please state the name of the shareholder that you represent. For those of you attending online, please ask any questions through the virtual meeting platform.
Resolutions one to four are ordinary resolutions, and as such, must be approved by a simple majority of the votes cast by the shareholders entitled to vote and voting on the relevant resolution. Voting on all resolutions will be conducted by way of a poll. Following voting on each resolution, I'll advise you of the number of votes that have been cast by postal vote and proxy ahead of the meeting for the resolution. Other than resolution four, it is the intention of the directors that any undirected proxies held by directors will be voted in favor of the resolutions. Undirected proxies held by directors in respect of resolution four will be disregarded. For those of you attending in person, you should have a voting card, which was given to you when you registered on the way into this room.
Please raise your hand if you do not have a voting card, and someone will come and give you one. For those of you attending online, you'll be able to cast your vote using the electronic voting card received when you registered online and you were validated. To vote online, you need to click "Get a Voting Card" within the virtual meeting platform. You will be asked to enter your shareholder or proxy number to validate. Please then mark your voting card in the way you wish to vote by clicking "For", "Against", or "Abstain". Once you've made your selection, please click "Submit Vote". This will be at the bottom of the card and then enable you to lodge your vote. Voting remains open until five minutes after the conclusion of the meeting, and the results will be announced by the NZX and ASX market announcement platforms afterwards.
If you require any assistance, again, please refer to the virtual meeting guide or use the helpline that is specified. Resolution one. This resolution is an ordinary resolution. The board is authorized to fix the fees and expenses of PricewaterhouseCoopers as auditor for the ensuing year. I note the automatic reappointment of PricewaterhouseCoopers as Vista Group's auditor under section 207(t) of the Companies Act 1993. The resolution is to authorize the board to fix the auditor's fees and expenses for the 2025 financial year. Are there any questions from those present relating to this resolution? Kelvin, do we have any questions online regarding the resolution?
No questions.
No questions.
Sorry, one moment. You said section 207(t) of the company?
Yes. Yes. T.
T as in Tom.
Yeah, let me get it. Capital T, capital T. There being no more questions, if you have not already done so, please now select "For", "Against", or "Abstain" for resolution one on your voting card. Please submit your votes. You'll now see on the screen the number of proxy and postal votes that have been received for resolution one. Might move to resolution two. The next item of business is an ordinary resolution for the re-election of non-executive director James Miller. As is required by the NZX listing rules, James retires by rotation at this meeting and offers himself for re-election. It'll come as absolutely no surprise to any of you that James's re-election has the unanimous support of the board. Brief biographical details for James were included in the notice of meeting, but I'd now like to invite James to say a few words before we take any questions.
Good afternoon. It's a privilege to speak to you today and to seek your support for re-election to the board of Vista Group. Over the past three and a half years, I've had the honor of serving as an independent director and as Chair of the Audit and Risk Committee for Vista. During that time, I've been committed to ensuring there's been robust governance and strong financial stewardship and effective risk oversight to support Vista's strategic ambitions and the delivery of long-term shareholder value. My background as a chartered accountant and a fellow of both the Institute of Chartered Accountants and the Institute of Directors has grounded my approach in integrity, accountability, and transparency. My broader governance experience, including roles with Channel Infrastructure, Mercury, Ryman, and previously with Auckland International Airport, the FMA, and ACC, has given me deep insights into the dynamics of New Zealand's corporate-listed company landscape.
I bring not only technical expertise, but also a balanced independent perspective shaped by a decade of governance experience across a range of sectors. As the chair of Vista's Audit and Risk Committee, I've worked with my fellow directors and Vista's management to ensure the financial reporting is sound, our risk frameworks are effective, and our sustainability practices and climate reporting are right-sized. Looking ahead, Vista remains well positioned to continue to deliver on an exciting opportunity presented by its cloud strategy, including to leverage the platform it has created to expand its total addressable market. If re-elected, I remain committed to continuing to contribute constructively to support the board, the management team, and you, most importantly, the shareholders. Thank you for the ongoing trust and the opportunity to serve. I'd be honored to continue contributing to Vista's future success. Ngā mihi nui, and thank you.
Thank you, James. Resolution two is that James Miller be re-elected as a director of Vista Group. Do we have any questions on this resolution? Kelvin, have we got any questions online?
No questions online.
Okay, there being no questions, if you've not done so already, please now select either "For," "Against," or "Abstain" for resolution two on your voting card. Please submit your votes. You'll now see on the screen the number of proxy and postal votes that have been received for resolution two. Move to resolution three. The next item of business is the ordinary resolution for the re-election of non-executive director Chris Nicole. As required by the NZX listing rules, Chris retires by rotation at this meeting and offers himself for re-election. Again, it should come as absolutely no surprise that Chris's re-election has the unanimous support of the board. Brief biographical details for Chris are included in the notice of meeting, and I now invite Chris to say a few words before we take any questions.
Good afternoon. It's also a privilege to be able to stand for re-election, and I want to thank you for all the support you've given me and our other directors over the past years. I thought I might just want to take a special thank you to Kirk. I think you initially selected me for the board, so thank you. Also, the fact that you've been a great guide over the years, so thank you very much, Kirk. For a little background, while I grew up in Auckland, I've been based in Melbourne for many years now, but I'm still not able to vote because I still carry a New Zealand passport, so it's not something I miss, I can assure you. I have a strong background in the information technology sector, particularly in running businesses with multiple service categories and products across various geographic areas.
My focus is and has always been on the customer and how people and solutions can help improve their businesses. Prior to joining Vista, I was the CEO at UXC Limited, an ASX-listed information technology company with over 3,000 employees, and we generated over $750 million in revenue. I'm currently the chairman of two small mid-cap Australian ASX-listed companies, Red Cloud and Playside. I joined Vista in 2017 and have served on both the audit and risk and the nomination and remuneration committees since that time. I'm currently the chair of the nominations and remuneration committee. With the support of the committee members and the board, we have continued to make significant strides in enhancing our remuneration framework to more closely align performance with pay.
We've also focused on continuing to evolve and improve the transparency of our remuneration disclosures, providing shareholders with a clearer understanding of how executive compensation is determined and awarded. I believe I still bring a strong set of complementary skills to the board and the executive team, including understanding technology solutions, experience with the challenges and the benefits of moving to a SaaS cloud digital-based solutions portfolio, and the potential to drive growth and operating leverage. I have a good financial and commercial experience, having been a CFO and a past member of the New Zealand Society of Accountants. A strong understanding of the operations and challenges that we face in a growing multifaceted business, and a good understanding of public markets and the need to deliver shareholder returns.
I continue to be very motivated and committed to supporting Stuart, the executive leadership team, the Chair, and our directors, and particularly our shareholders. I think it's a great privilege to represent a team, including shareholders, in this office. As such, I'm keen to continue, and with that, I would be privileged to offer myself for re-election at this meeting. Thank you.
Thank you, Chris. Resolution three is that Chris Nicole be re-elected as a director of Vista Group. Are there any questions for this resolution?
Yes.
It's actually a matter of housekeeping. There are several shareholders here who could benefit from just borrowing a pen, and in the interest of keeping administration costs down, I promise to give it back at the end. Thank you. You're a champ.
Do we have any other further questions?
My name is Henry Chen, and I'm a shareholder. I wish to inquire about Chris because you are on the board since, is it 2017, at the risk committee in 2017? Yeah. I wish to inquire then why was, I say, in the year 2019 the company gave money, $7.3 million, to Vista China to, what should I say, lend them money free of interest, that sort of thing. $7.2 million went into bust. At that time, there were more shareholders in this company. Maybe three years ago, there were still shareholders not happy with this incident. I noticed that the number of shareholders now are less than five years ago. I wish to point out that not to repeat this sort of stupid things anymore.
Would the board be, would the board come, what should I say, promises is, what should I say, not of Stuart. Stuart is doing a very good job. Have more markets now, such as France, etc. Yeah. Chris, at that time, who promised to lend them money?
Look, thank you very much for the question. I think what I might just sort of say there is while Chris was a member of the Audit and Risk Committee in 2017, he certainly was not the chair of that. I think there are a few more details that might be of benefit taking offline on this particular question, and perhaps some of our team can talk to you about what occurred. I probably would remind you too that since 2021, the CAGR share price value appreciation in this company has been 19%. We have pretty much outperformed every other company on the stock exchange on that CAGR. Hopefully you are feeling a lot better now. Maybe the team can come and have a wee chat afterwards and provide more details about how we have dealt with Vista China because I think there might be a bit of confusion there.
Is there anything else you would like to add? Chris, are you okay?
No, I'm okay. I think that's an interesting market to do business in. I think the original intention was very strong, and I think our exit was all equally well planned. So anyway.
Any more questions on this resolution? Kelvin, any questions?
No questions online.
Okay. All right. There being no more questions, if you've not done so, please now select "For," "Against," or "Abstain" for resolution three on your voting card. Please submit your votes. You'll now see on the screen the number of proxy and postal votes that have been received to support Chris's re-election. The next item of business is the ordinary resolution for the increase of the director fee pool. Now, comprehensive information regarding the Gerder & Associates report, the independent report, the current director fee pool, the director fees per role, and the proposed increase in the director fee pool are set out in the notice of meeting, and you will have had access to that. It's been four years since the Vista Group's director fee pool has been reviewed by shareholders, and since the beginning of 2021, Vista Group's share price has appreciated 114%.
In March 2025, the board engaged Gerder & Associates to undertake a benchmarking exercise and provide an independent assessment of the appropriate level of non-executive director fees. The Gerder & Associates report benchmarked Vista Group's director fee pool and director fees for each role against a peer group with similar characteristics to Vista Group. We engaged a number of stakeholders before we set this group. One of the findings in the report is that the Vista Group's director fee pool is positioned below the 25% percentile of the comparator group, while Vista Group's market cap is positioned at the 42% percentile of the comparator group. The requested increase of the director fee pool would align it with the 40% percentile in the peer group, with the chair and director's fees adjusted accordingly.
As I said, comprehensive information regarding this increase is included in the notice of meeting, and the Gerder & Associates report, a copy is available on the Vista Group website if you'd like to read it. The non-executive directors and their associated persons are disqualified from voting on resolution four, including any discretionary proxies. Any votes cast on resolution four by non-executive directors and their associated persons will be disregarded, except where they've been cast by the non-executive director or their associated person as an expressly directed proxy. Resolution four is that the maximum aggregate annual remuneration payable to non-executive directors be increased by NZD 265,000 from NZD 725,000 to NZD 990,000 plus GST as appropriate for six directors. Are there any questions on this resolution?
Questions online?
Okay. There being no questions, if you've not done so already, please now select "For" against or "Abstain" for resolution three on your voting card. Please submit your votes. You will now see on the screen the number of proxy and postal votes that have been received for resolution four. Thank you. That concludes the formal business of the meeting. For those of you attending in person, representatives of MUFG will now collect your voting cards. Online attendees should submit your votes. The results will be announced on the NZX and the ASX after the conclusion of the meeting. The meeting is now open for general business, and I'd like to give shareholders the opportunity to ask any questions that they might have. Yes.
Hello. Colin Upshurt, shareholder. I'm here today as a satisfied shareholder with regards to the obvious share price movement, and surely we're only at the beginning of the journey. I have almost no understanding of the industry that we're in, and I'm a fairly simple fellow, so I'm here really to just capture what the future looks like in terms of high-level helicopter kind of view of the business. As I said, I don't know the specifics, and I haven't got any particular industry expertise, but I understand some companies, and I'm trying to understand this one. I guess the thing that captures me is just looking between the two years, 2023 and 2024, the cost of sales has gone up at a bigger percentage than the sales because the gross profit as a percentage of sales has declined.
Now, as a digital company operating in the cloud, one would hope that the cost of providing the service to our customers is somewhat constrained, and the top line can go for gold. Can I just get a bit of background and understanding as to where we're at in the journey and what happens from here? Because what I'm looking for is a zero experience where your cost is somewhat constrained and your top line just goes.
Yeah. No.
If that's not reasonable, then please just give me some understanding.
I think I might start, and then I'll pass off to some of the experts in the room on the actual numbers. Stu went to a little bit of effort to try and explain where we are in terms of our strategy. We're an enterprise software company transitioning to the cloud. It's not apples and apples if you tried to compare with a fully SaaS now company like Xero. As you transition enterprise clients to the cloud, you will necessarily have costs associated with the transition. The reason why we're quite proud of our growing EBITDA margin is that it's doing exactly what you're asking us to do. As we grow the EBITDA margin at 15.5%, exceeding what our guidance was, you can start to see a pathway towards an EBITDA margin that will have a three in front of it.
You have to transition your clients during the course of that. You will have some costs associated with that, and then you get the benefits of the platform model. To answer the other part of your first question, which was what happens once you're at the cloud, Stu was trying to talk about that adjacency piece around payments, about family entertainment centers, and other adjacencies that are unlocked because suddenly we have our clients across the globe on a cloud system, which we can innovate more efficiently for them. Your question's bang on. We should see greater operating leverage and margin through time, and you should hold us to account to deliver that. Okay. Are there any other questions?
There's no questions online.
Okay. Yes, Oliver.
Thank you, Susan. Just in terms of going back to the Potentia Group interest during 2024, a big play at the time was related to the potential for opportunity that they could provide. I mean, it's great to see that that relationship is healed. It's on track. What sort of partnership opportunities do you think will accrue to shareholders in the near term and the medium term from that relationship?
That's a good question. What's fantastic about Potentia and Vista Group is we do share one common goal, and that is to accelerate the operating leverage and the performance in terms of growing value for the company. The first things first is probably to pull the relationship, as you say, back into that nice constructive phase. We're working pretty well with Armour and Lochlann and the team in terms of that, and we deal with them like we deal with the other institutional shareholders. They're also leaning into their ideas with Stu and the team around ways to this earlier question around perhaps how greater operating margin could be extracted through that time. To be fair, we're really open-minded to the suggestions of any way in which we can actually grow faster and deliver more value to all.
No, it's definitely a step change from where we were six months ago.
Thank you.
Susan, we've got a question online. It's from FX Hedging. Sorry, it's about the FX Hedging policy from Michael Peter Johnson. From reading the 2024 annual report, it states the policy allows for FX hedging. However, it appears that no FX hedging took place. Is this still the case? If not, why not?
On this one, I think I'm going to take an expert to talk about the FX hedging policy. So please to introduce our new Chief Financial Officer, Matt Thompson.
Good afternoon, everyone. Yeah, the FX hedging policy is there to allow us to do a few things. While we do not do any derivatives or any kind to manage that risk, what we are doing is a balance sheet hedge by using our debt facilities, drawing those in U.S. dollars to be able to offset the cash and receivables, which are also held in U.S. dollars. Having that natural offset is a cheaper way for us than buying a derivative on the market.
Okay. It appears that there are no more questions. Oh no, Brian. Go Brian.
That's a very good question, but people might know I've got a bit of history with the company, and Kirk has been instrumental along the way. As a shareholder, thanks, mate. I think we all should all be grateful.
Brian, what about awesome, awesome founders? On our own, he's making me sort of feel like I'm now wobbling in my voice too, so never fails. Everyone, that completes the business of the meeting. Thank you for joining us today and for your continued support of Vista Group. I'd also like to thank those present to join us for light refreshments in the area that's outside this meeting room. I now declare the meeting closed. Thank you very much.